Abstract

VELASCO, Omar  and  REVILLA, Natalia. Effects of Landlockedness on Cost Inflation. A Spatial Econometric Approach. rlde [online]. 2019, n.31, pp.31-75. ISSN 2074-4706.

The literature about geographic economics establishes that international trade is a determinant factor for economic development and this is determined by its geographic position. This paper wants to analyze how important are the freight transport costs and time in order to activate the trade of goods and services to the rest of the world and is there an effect on the landlockedness economies, and does the spatial dependence play an important role. In order to answer these questions it is developed a model with spatial dependence for all the landlockedness and non-landlockedness countries in the world. It is found that landlockedness increases domestic prices through the increase of import costs and this is the main damage to landlockedness countries, this effect is higher when more landlockedness countries are competing for the same maritime access. The greater commercial opening favors more to the exports of the countries with access to the sea generate spillover effects reflected in an apparent geographic concentration of higher GDP per capita, but with greater income inequality.

Keywords : Spatial models; Inflation; Spatial Distribution and International Trade.

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